Brooklyn Union Gas Co. v. Exxon Mobil Corp.

• Decision Date: 12 August 2021
• Docket Number: 17-CV-45 (MKB)
• Citation: 554 F.Supp.3d 448
• Parties: The BROOKLYN UNION GAS COMPANY d/b/a National Grid NY, Plaintiff, v. EXXON MOBIL CORPORATION, Defendant.
• Court: U.S. District Court — Eastern District of New York

554 F.Supp.3d 448

The BROOKLYN UNION GAS COMPANY d/b/a National Grid NY, Plaintiff,

v.EXXON MOBIL CORPORATION, Defendant.

17-CV-45 (MKB)

United States District Court, E.D. New York.

Signed August 12, 2021

Bradley Scott Rochlen, Pro Hac Vice, Robert Middleton, Pro Hac Vice, Russell Bertram Selman, Pro Hac Vice, James M. Showalter, Schiff Hardin LLP, Chicago, IL, Mir Y. Ali, Pro Hac Vice, for Plaintiff.

Daniel Farino, Pro Hac Vice, David Edelstein, Pro Hac Vice, Archer & Greiner, P.C., Haddonfield, NJ, John B. McCusker, Katherine E. Suell, McCusker Anselmi Rosen & Carvelli, PC New York, NY, Michael Lauricella, Archer & Greiner P.C., Hackensack, NJ, Rosemarie DaSilva, McCusker Anselmi Rosen & Carvelli, Florham Park, NJ, for Defendant.

MEMORANDUM & ORDER

MARGO K. BRODIE, United States District Judge:

Plaintiff The Brooklyn Union Gas Company, doing business as National Grid NY, commenced the above-captioned action on January 4, 2017, against Defendant Exxon Mobil Corporation ("Exxon") and fourteen other defendants not named in the present proceeding.¹ (Compl., Docket Entry No. 1.) Plaintiff filed an Amended Complaint asserting claims for recovery of response costs under section 107(a), and contribution under section 113(f)(3)(B) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. § 9601 et seq. ("CERCLA"), the Federal Declaratory Judgment Act, 28 U.S.C. § 2201 (the "Declaratory Judgment Act"), and the New York Navigation Law, N.Y. Nav. Law. §§ 170 –97. (Am. Compl.) The Court dismissed the Amended Complaint and granted leave to file a second amended complaint to assert section 107 claims. (Min. Entry dated Mar. 26, 2019.) On May 23, 2019, Plaintiff filed a SAC, asserting claims for recovery of response costs under sections 107(a) and 113, Declaratory Judgment Act claims, and a New York Navigation Law claim. (SAC.) On August 14, 2020, the Court dismissed Plaintiff's CERCLA § 113 claim with prejudice, dismissed all other claims without prejudice, and granted Plaintiff leave to amend its CERCLA § 107 and Declaratory Judgment Act claims and to replead its New York Navigation Law claim. (Mem. and Order dated Aug. 14, 2020 (the "August 2020 Decision") 22–23, Docket Entry No. 152; Corrected Mem. and Order dated Aug. 19, 2020, Docket Entry No. 154 (reflecting that the United States also moved to dismiss the SAC).) On September 14, 2020, Plaintiff filed a TAC, asserting the same claims raised in the SAC, including the CERCLA § 113 claim, but only as to Exxon. (TAC 15–25.) Defendant now moves to dismiss the TAC for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, and Plaintiff opposes.²

For the reasons set forth below, the Court grants Defendant's motion to dismiss the section 113 claim and denies Defendant's motion to dismiss the section 107, Declaratory Judgment Act, and New York Navigation Law claims.

I. Background

a. Factual background

Plaintiff seeks to recover for costs "arising out of the disposal, release, and/or threatened release of hazardous substances into the environment at current and historical facilities owned and/or operated by [Defendant]" at the area "adjacent to the Bushwick Inlet and the East River in Brooklyn, New York." (TAC ¶ 1.) Plaintiff owned the Williamsburg Works Manufactured Gas Plant ("Williamsburg MGP") located on Block 2287 (the "Williamsburg MGP Site"), which was "operated and controlled by ... [Defendant] and/or its corporate predecessors" and was situated "adjacent to the facilities owned and/or operated by Defendant." (Id. ¶ 2.) Defendant and its corporate predecessors "owned, managed, and/or operated the Pratt Works Refinery (the ‘Refinery’)," which comprised Blocks 2277 and 2294 (the "Refinery Site"). (Id. ¶ 3.) The Refinery Site "bounds the Williamsburg MGP Site on two sides." (Id. ¶ 21.)

The Refinery was built in the 1860s and "manufactured kerosene from coal and/or crude petroleum and produced naphtha and lubricant oils." (Id. ¶ 3.) At the height of its operations, the Refinery "handl[ed] more than sixty million gallons per year of kerosene, crude petroleum, refined oils, naphtha, tar, benzene, lubricating oils, gasoline, and turpentine" and "had in excess of forty tar and naphtha tanks onsite, numerous oil/water/solid separation units, and asbestos containing material covered numerous pieces of equipment." (Id. ¶ 26.) Its operations caused the release of hazardous substances into the environment, such as oil, tar, chemicals, sludges, emulsion solids, tank bottoms, and spent catalyst. (Id. ¶¶ 3–4.) "[T]hese hazardous substances [also] came into contact with or became entrained with gasoline and other petroleum products that were released at the Refinery Site and Williamsburg MGP Site." (Id. ¶ 4.) Such substances are "consistent with those associated with kerosene refineries." (Id. ¶ 13.) The Refinery also operated a canning factory, which led to the release of other hazardous substances, including metals, volatile organic compounds ("VOCs"), and semi-volatile organic compounds ("SVOCs"), at the Refinery Site and Williamsburg MGP Site. (Id. ¶¶ 27–28.) Along with discharge caused by the Refinery's general operations, (id. ¶¶ 36–41), there were also "many accidents, spills, leaks, and fires at the Refinery," which caused additional releases of hazardous materials, (id. ¶¶ 33–35).

The Williamsburg MGP was constructed in the 1860s by the Williamsburg Gas Light Company. (Id. ¶ 42.) Defendant's corporate predecessor, Standard Oil, exercised significant control over the oil and gas market and eventually formed The Brooklyn Union Gas Company to acquire the Williamsburg Gas Light Company. (Id. ¶¶ 43, 47.) "Standard Oil maintained control of The Brooklyn Union Gas Company and the Williamsburg MGP for decades following this merger." (Id. ¶ 47.) The Williamsburg MGP ceased fulltime operations in 1934 and was dismantled prior to 1941. (Id. ¶ 49.) "Neither [Plaintiff] nor any of its corporate predecessors or subsidiaries have had control of the site since 1946." (Id. ) Plaintiff has discovered "significant petroleum contamination [at the Williamsburg MGP Site], which is entrained with various other hazardous materials, including, but not limited to, waste oil." (Id. ¶ 59.) Plaintiff alleges that Defendant "would have inevitably released hazardous substances at the Williamsburg MGP Site during the period of Standard Oil's control of The Brooklyn Union Gas Company." (Id. ¶ 50.)

In February of 2007, Plaintiff and the New York State Department of Environmental Conservation (the "NYSDEC") entered into an Order on Consent and Administrative Settlement regarding the investigation and remediation of several former manufactured gas plants that were owned or operated by Plaintiff within the State of New York (the "Consent Order"). (Id. ¶¶ 51–52.) In August of 2007, Plaintiff and the NYSDEC agreed to modify the Consent Order to add certain sites to the agreement, including the Williamsburg MGP (the "Modified Consent Order"). (Id. ¶ 53.) Plaintiff worked with the NYSDEC to develop an Interim Remedial Measure Plan for part of the Williamsburg MGP, (id. ¶ 54), but by letter dated "November 7, 2016, prior to NYSDEC's approval of a final Remedial Design/Remedial Action Work Plan, [Plaintiff] exercised its right to terminate the Williamsburg MGP from the [Modified Consent Order]," (id. ¶ 55). Pursuant to the Modified Consent Order, termination of the Williamsburg MGP became "effective five days following receipt of written notice, [on] November 14, 2016." (Id. ) Plaintiff continued to investigate and incur costs at the Refinery Site and Williamsburg MGP Site after the withdrawal from the Modified Consent Order became effective on November 14, 2016. (Id. ¶ 56.)

On November 1, 2017, Plaintiff and the NYSDEC entered into a Stipulation and Order of Settlement and Discontinuance (the "Stipulation") in an Article 78 proceeding in the New York Supreme Court, Albany County. (Id. ¶ 57.) Pursuant to the terms of the Stipulation, as of its execution, the Modified Consent Order would "have no further force or effect with regards to the Williamsburg MGP." (Id. (quoting Stipulation and Order of Settlement and Discontinuance ¶ 2, annexed to Notice, Docket Entry No. 116-1).) After the execution of the Stipulation, Plaintiff continued to investigate and incur costs at the Refinery Site and Williamsburg MGP Site. (Id. ¶ 58.)

In December of 2018, Defendant entered into an Order and Consent with the City of New York pursuant to the New York Navigation Law, whereby Defendant is required to "investigate portions of Block 2277 of the Refinery Site." (Id. ¶ 60.) The City of New York approved Defendant's "Site Characterization Work Plan" (the "Work Plan"), which provided for a "limited surficial investigation focused on investigating post-Refinery activity" at the site. (Id. ¶¶ 61–62.) According to the NYSDEC and supported by the Work Plan, Defendant's investigation is to be completed pursuant to "Article 12 of the New York Navigation Law" and only relates to operations of major oil storage facilities ("MOSFs"). (Id. ¶ 62.) Plaintiff alleges that the planned investigation would not address Defendant's "Refinery releases, which likely exist far below the surficial depths of the MOSF facility," and that Defendant has not previously conducted any investigation into the Refinery Site. (Id. ¶¶ 62–63.)

b. Procedural background

On January 4, 2017, Plaintiff commenced this action, (Compl.), and after a pre-motion conference on February 16, 2017, (see Min. Order dated Feb. 16, 2017), Plaintiff filed an Amended Complaint asserting CERCLA claims for recovery of response costs under sections 107(a) and 113, a claim for a declaratory judgment, and a New York Navigation Law claim, (Am. Compl.). Defendants separately moved to dismiss the Amended Complaint for failure to state a claim pursuant to Rule 12(b)(6),³ and on April 5, 2018, the Court referred Defendants’ motions to...